Markets This Morning
UK wholesale gas prices have reversed much of Wednesday’s gains in early trading this morning, with the front-month October contract down 3.01p/th at 179.14p/th. Further along the curve, prices are also edging lower, with the Q2-27 contract trading 2.16p/th below Wednesday’s settlement. Oil prices, meanwhile, are moving marginally higher, with the latest shipping data highlighting a further deterioration in flows through the Strait of Hormuz. Only six vessels transited the Strait on Wednesday, well below the 10-day average of 13 and dramatically below pre-war levels of around 130–140 vessels per day, illustrating the continued impact of renewed hostilities in the region.
Yesterday in Summary
UK wholesale gas prices strengthened on Wednesday as renewed U.S.-Iran strikes heightened concerns over regional LNG supply, with October and Winter contracts settling at 182.15p/th and 182.47p/th respectively. Elevated prices are also curbing LNG demand across South-East Asia, potentially leaving additional supply for European markets. Brent crude rose 1% to $95.63/bbl as the renewed conflict also increased concerns over disruption to oil flows through the Strait of Hormuz, while lower U.S. inventories provided further support. European carbon prices gained around 1%, peaking at €84.50/t, while GB baseload power strengthened alongside gas, despite weaker prompt demand from milder weather and increased wind.
